March 15, 2005

Co-creating with Customers

Reveries has a great article today about several companies that are co-creating products with their customers.

About three-quarters of attempts at innovation fail because of the way
corporations go about it, says Eric Von Hippel of M.I.T., as reported
by in The Economist (3/10/05). According to Eric, who is also about to publish a book called Democratizing Innovation,
the mistake is that the firms typically send market researchers out
into the field to identify "unmet needs" and then turn the results over
to product-development teams. He says they should instead identify "the
few special customers who innovate" and invite them in to brainstorm
the possibilities. That's the way GE's healthcare does it. GE calls
these special customers "luminaries" and they meet regularly to discuss
GE's latest technologies and how to turn them into products.

...Staples held "a competition among customers to come up with
new ideas. It got 8,300 submissions.

...Two years ago, BMW "posted a
toolkit on its website" that allowed its customers to suggest ways in
which the carmaker "could take advantage of advances in telematic and
in-car online services." About 15 of the 1,000 customers who used the
kit were invited to meet with BMW's engineers in Munich and some of the
resulting ideas are now in concept stage.

...Back in 1997, Lego was about three weeks away from launching a
"build-it-yourself robot development system" called Mindstorm, when
about 1,000 hackers "downloaded its operating system, vastly improved
it, and posted their work freely online. After a long stunned silence,
Lego appears to have accepted the merits of this community's work:
programs written in hacker language may now be uploaded to the
Mindstorms, mindstorms.lego.com, website.

In any case, as Eric Von Hippel notes, the concept doesn't
cost much because many customers consider being "listened to"
compensation enough. As BMW's Jeorg Reimann explains: "They were so
happy to be invited by us, and that our technical experts were
interested in their ideas. They didn't want any money."

For a pretty extensive conversation about co-creation, check out the posts over at Brandshift here,here and here.

I question how many companies "send market researchers out into the field to identify unmet needs," other than in the consumer products industries. The way it usually works in business-to-business companies is that unmet customer needs are usually identified via the field sales organization.

An alert, creative sales organization can be a very important factor in innovation.

Doesn't this put the customer back squarely as the main focus of business, which contradicts your November post about the "ecosystem"? This is a connection with unadulterated feedback, bypassing professional filters such as yourself.

You may wish to revisit your earlier theme.Perhaps I misread it as a general boredom with hot trends and easy buzzwords.